1. The Boeing Company (NYSE:BA)
Median Share Price Upside Potential: 29.02%
Total Analysts: 22
Number of Hedge Fund Holders: 42
Weighted Ranking: 1
Boeing is a leading aerospace company that manufactures commercial airplanes, space systems, and defense equipment for customers in more than 150 countries. It also has an impressive product line of unmanned vehicles that operate in the air, across the sea, on the ground, and beyond the Earth’s atmosphere.
In February this year, The Boeing Company (NYSE:BA) delivered the first MQ-25 Stingray to the U.S. Navy for testing. This is the first carrier-based aircraft that does not require a pilot to be added to the Navy’s fleet. The drone will provide aerial refueling capabilities to extend the combat range of deployed fighter jets.
Another prominent UAV built by the company is the ScanEagle, which provides low-altitude surveillance and reconnaissance capabilities. Boeing is also the maker of the MQ-28 Ghost Bat, a stealth, multirole, unmanned combat aerial vehicle, which is primarily flown by the Royal Australian Air Force.
2024 has been a rough year for Boeing, with its shares losing over 40% of their value, year-to-date. It got off to the worst possible start in January, after a door plug of an Alaska Airlines 737 Max 9 flight fell off after takeoff. Since the incident, there has been a slowdown in the production of airplanes, with an increased focus on safety. It is also in the midst of a labor crisis, with around 33,000 workers going on a strike since September 13, demanding higher wages, job security, and a restoration of their pension.
On October 23, the company announced its financial results for the third quarter of 2024. Revenue was recorded at $17.8 billion, down 1% year-over-year, due to the impact of lower commercial wide-body deliveries and the IAM strike. This resulted in a quarterly loss of over $6 billion, translating to a loss per share of $10.44, which was worse than forecasts of a $10.35 loss per share.
Despite the challenges, most analysts believe that Boeing is too big a company to fail, and with a backlog of orders worth $500 billion and international travel growing every year, it is bound to recover once the headwinds are over. It booked $8 billion in orders during the quarter, which included a $2.6 billion award from the U.S. Air Force for two E-7A Wedgetail aircraft. The aerospace giant is also working on another key defense project, the NGAD program, which aims to develop a sixth-generation fighter jet to replace the F-22 Raptor by 2030.
Wall Street analysts have consensus on the stock’s Buy rating and expect a median upside potential of over 29% in its share price, which makes The Boeing Company (NYSE:BA) the best military drone stock to buy according to analysts.
Overall, BA ranks first among the 8 Best Military Drone Stocks To Buy According to Analysts. While we acknowledge the potential of military drone companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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